SEBI Issues Clarifications on Regulation 23 of Listing Regulations

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Jun 30, 2022

SEBI Issues Clarifications on Regulation 23 of Listing Regulations

Regulation 23(3)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) specifies that omnibus approval granted by the audit committee for related party transactions (‘RPTs’) will be valid for a period not exceeding one year. Regulation 23(4) of the Listing Regulations also requires shareholders’ approval for material RPTs. SEBI, by its Circular dated April 08, 2022, clarified that: (i) the shareholders’ approval of omnibus RPTs approved in an AGM will be valid up to the date of the next AGM for a period not exceeding 15 months, i.e., the maximum time gap permitted between two AGMs; and (ii) the shareholders’ approval of omnibus RPTs approved in general meetings other than AGMs, will be valid for a maximum period of one year.

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